Supreme Court: In a petition by Confederation of Real Estate Developers of India (CREDAI) seeking review of the earlier judgment in Vanashakti v. Union of India, 2025 SCC OnLine SC 1139 (Vanashakti judgment) which had barred post-facto (ex-post) environmental clearances (ECs), the 3-judge bench of BR Gavai, CJI and K. Vinod Chandran, and Ujjal Bhuyan, JJ, in a 2:1 verdict recalled the Vanashakti judgment and has held that retrospective ECs may be granted, but only for “permissible activities” as defined in the relevant regulatory framework. Further, these ECs will typically require payment of penalties/fines. BR Gavai, CJI, and K. Vinod Chandran, JJ formed the majority, while Ujjal Bhuyan, J dissented.
What was under Review?
The Vanashakti judgment had barred post-facto ECs, putting certain ongoing or completed projects without prior EC at risk of demolition. CREDAI filed a review petition, arguing that the earlier judgment ignored precedents allowing ex-post ECs in exceptional cases. The petition sought permission for retrospective ECs for projects that are legally permissible.
Also Read: The Supreme Court on the Ex Post Facto Environment Impact Assessment?
Majority Opinion: BR Gavai, CJI & Justice K. Vinod Chandran
Effects of Vanashakti judgment if not recalled
Gavai, CJI, noted that in Vanashakti judgment , the Court had held that even after the payment of penalty, if the project is under construction, the same has to be stopped and demolished and even if operation has already commenced, the same has to be stopped and demolished.
He, however, observed that is approach contradicts the framework of the 2017 Notification and the 2021 OM, which allow environmental clearances only for projects that are legally permissible and mandate demolition only where a project is impermissible or cannot be made environmentally sustainable. The 2021 OM, issued pursuant to NGT directions in Tanaji B. Gambhire v. Chief Secretary, Government of Maharashtra1, also imposes substantial penalties for violations.
He also noted that many government and PSU projects worth thousands of crores, many having completed EIAs and other formalities, could not receive EC due to a stay order of 2 January 2024.
He, hence, made the following observations on the effects of Vanashakti judgment if not recalled
-
Completed or nearly completed public projects worth ₹20,000 crore may need to be demolished, despite being lawful and environmentally assessed. He gave the following examples of affected projects
-
AIIMS, Odisha (962-bed medical college and hospital).
-
Vijayanagar Greenfield Airport, Karnataka.
-
Common effluent treatment plants (CETPs) — whose demolition would harm environmental protection.
-
-
Even projects permissible in law would have to be demolished first and then re-constructed after obtaining a fresh EC, which would be contrary to public interest, wasteful, and environmentally harmful due to demolition-related pollution.
-
Demolition of massive public projects would waste public money and create more pollution.
-
It will also result in inequity as the projects that received EC before the Vanashakti Judgment remain protected but similar projects that were on the verge of receiving EC but were halted due to the Court’s interim order would face demolition.
“Demolition of the projects already completed would rather than being in public interest would result in throwing the valuable public resources in dustbin.”
Chandran, J, concurring with Gavai, CJI held that the Not. of 2017 and O.M. of 2021, without holding on its validity, was brought in, not as a regressive measure but reckoning the ground realities. He stressed that demolition of the structures raised, merely for the purpose of applying for a prior EC to construct afresh, would not only cause undue hardship but also result in further depredation of the environment by the debris generated, which will not be possible of reuse leading to abject waste of resources and massive loss of revenue.
He also observed that it cannot be said that when the State is found to be conferred with a power to regulate, it is totally denuded of the power to relax the rigor brought in, merely because it concerns the environment. It could be held circumscribed in its invocation, in certain matters, still, the power cannot be found to be totally absent.
“A rigid, pedantic approach first directing demolition and then enabling an application for EC for commencing the very same project would be akin to setting the clock back to save time.”
Judicial Discipline and Conflict with Other Supreme Court Judgments
Gavai, CJI reiterated that a two-judge Bench is bound by an earlier decision of another Bench of equal strength and cannot take a contrary view; if reconsideration is needed, the matter must be referred to a larger Bench, and any later decision ignoring an earlier co-equal judgment is per incuriam.
He noticed that Section 15 of the Environment (Protection) Act deals solely with penalties and neither authorizes nor prohibits regularization of projects, making the Vanashakti Judgment’s conclusion, that projects must be stopped and demolished even after penalties are paid, an incorrect interpretation of the provision. He also held that the Vanashakti Judgment failed to properly follow or consider key judgments such as Common Cause v. Union of India, (2017) 9 SCC 499, Alembic Pharmaceuticals Limited v. Rohit Prajapati, (2020) 17 SCC 157, Electrosteel Steels Limited v. Union of India, (2023) 6 SCC 615, D. Swamy v. Karnataka State Pollution Control Board, (2023) 20 SCC 469 and Pahwa Plastics Private Limited v. Dastak NGO, (2023) 12 SCC 774.
He held that a two-judge bench cannot overrule another two-judge bench; it should have referred the issue to a larger bench.
Chandran, J, concurring with Gavai, CJI observed that the balanced approach, in the wake of admitted violations, taken in Common Cause & Alembic, have been completely lost sight of, by the judgment under review. He observed that,
“It is one thing to find Electrosteel, Pahwa and D. Swamy per-incuriam in the original proceeding, which would have restrained a review on that ground; but quite another to reject the prayer for review on the ground that though not noticed or referred to, those decisions are per incuriam; which still is a valid ground for review for not having been considered.”
Dissent by Justice Bhuyan
Bhuyan, J dissented by holding that no sufficient ground has been made out for recall/review.
He made the following observations,
-
The Ministry has not filed any review petition against the Vanashakti judgment, effectively accepting the Court’s verdict.
-
What is binding in a judgment is the principle upon which the case is decided. The enunciation of the reason or principle on which the question before a court is decided is alone binding as a precedent. The final outcome or decision is binding between the parties only but it is the abstract ratio decidendi ascertained on a consideration of the judgment in relation to the subject matter of the decision which alone has the force of law and constitutes a binding precedent under Article 141 of the Constitution of India. It is the ratio which is binding on subsequent Benches, coordinate or smaller. The conclusion does not operate as a ratio decidendi.
-
The principle of per incuriam would be attracted only when a decision is rendered in ignorance of some statutory provision(s) or a precedent binding on the court. Ordinarily, a ruling of a coordinate Bench is binding on subsequent coordinate Benches or on Benches of lesser strength. However, there is an exception to this rule. A decision which is rendered per incuriam has no precedential value. Such a decision would not be binding as a judicial precedent. A coordinate Bench can disagree with it and decline to follow it. The per incuriam rule is applicable to the ratio decidendi only and not to obiter dicta. The subsequent decision shall be declared per incuriam only if there exists a conflict in the ratio decidendi of the pertinent judgments.
-
The trilogy of Electrosteel, Pahwa and D. Swamy which are being followed by the review judgment are not only hit by the principle of per incuriam, those are also in complete conflict with the principle of non-regression. Electrosteel, Pahwa and D. Swamy and the review judgment take a complete u-turn from the trajectory of environmental jurisprudence which has evolved over the years and consistently followed a pattern of progression to prevent environmental degradation and protection of the environment.
-
A false narrative was being created pitting environment against development. Ecology and development are not adversaries but a part of the constitutional construct of sustainable development. There is no antinomy between development and environment.
-
The argument that if the illegal projects have to be demolished in terms of the Vanashakti judgment and have to be rebuilt again after obtaining EC, the demolition will generate more dust and more pollution, at the first blush, appears to be attractive, but has no merit at all. That apart, such a construct is against any logic, economic or otherwise.
-
“The deadly Delhi smog reminds us everyday about the hazards of environmental pollution.” Supreme Court as the highest constitutional court of the country has the duty and obligation under the Constitution of India and the laws framed thereunder to safeguard the environment. It cannot be seen backtracking on the sound environmental jurisprudence that has evolved in this country, that too, on a review petition filed by persons who have shown scant regard for the rule of law.
“The review judgment is an innocent expression of opinion. It overlooks the very fundamentals of environmental jurisprudence. Precautionary principle is the cornerstone of environmental jurisprudence. Polluter pays is only a principle of reparation. Precautionary principle cannot be given a short shrift by relying on polluter pays principle. The review judgment is a step in retrogression.”
[Confederation of Real Estate Developers of India (CREDAI) v. Vanashakti, Review Petition (C) @ Diary No.41929 of 2025, decided on 18.11.2025]
Judgment Authored by:
Majority Opinion: BR Gavai, CJI
Concurring Opinion: K. Vinod Chandran, J
Dissent: Ujjal Bhuyan, J
Advocates who appeared in this case:
For Petitioner(s): Mr. Mukul Rohatgi, Sr. Adv. Mr. Samit Shukla, Adv. Ms. Saakshi Saboo, Adv. Ms. Devanshi Singh, Adv. Ms. Vaibhavi Bhalerao, Adv. For M/s Trilegal Advocates on Record Mr. Kapil Sibal,Sr.Adv. Mr. Nishant Patil,Adv. Mr. Rohit Sharma,Adv. Mr. Arijit Dey,Adv. Mr. Abhishek Gupta,Adv. Ms. Bhumi Agrawal,Adv. Mr. Awanish Gupta,Adv.
For Respondent(s): Mr. Gopal Sankarnararayanan, Sr. Adv. Mr. Vanshdeep Dalmia, AOR Ms. Natasha Dalmia, Adv. Ms. Anisha Jain, Adv. Ms. Shambhavi Singh, Adv. Mr. Shourya Dasgupta, Adv. Ms. Trisha Chandran, Adv. Ms. Anitha Shenoy, Sr. Adv. Ms. Rashmi Nandakumar, AOR Ms. Yashmita Pandey, Adv. 1 Ms. Sadhana Madhavan, Adv. Ms. Kavana Rao, Adv. Miss Ayushma Awasthi, AOR Mr. Raju Ramachandran, Sr. Adv. Mr. Mukund P. Unny, AOR Mr. Harish Vasudevan, Adv. Mr. Sanjay Nair S, Adv. Mr. Afeef Mohammed, Adv. Ms. Shruti Narayan, Adv.
Buy Constitution of India HERE
